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Author Topic: Starting up in Ukraine  (Read 1228 times)

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Offline SuperPanda

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Starting up in Ukraine
« on: September 21, 2016, 02:42:30 PM »
After some consideration and finding out earlier on today my job is done for (I'm being put on gardening leave), I've decided to take the dive and start up in Ukraine providing that a suitable factory/distillery with good infrastructure to ship to the EU/UK can be found.

I've spoken to a couple of firms both here in the UK and Ukraine, they've suggested that I set up through a Cypriot company that owns the Ukrainian subsidiary for tax reasons but it is only suitable for dividend payments, I'd still be liable for the full 25% (bar usual deductions) unless I cook the books :rolleye0009:

I'll be investing a significant amount, along with a business partner who is doing it with me but has more experience than I in this particular area, but I'm unsure as to whether the hassle of having an extra company in Cyprus is worth it to save on dividend payments that won't come for quite some time.

The main reason we picked Ukraine is because of the cheapness of set up and labour, we'd considered Poland but it's was more expensive despite slightly less hassle.

Does anyone have any opinions on whether I should listen to the various people I've spoken to thus far, I don't remember there being a Cypriot company when I was consulting before in Ukraine (I didn't set up the business, I came in much later) which is why I'm puzzled and no one has helped me out in my discussions thus far.

Online andrewfi

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Re: Starting up in Ukraine
« Reply #1 on: September 21, 2016, 03:30:49 PM »
(Q) How can a foreigner become a millionaire in Ukraine?

(A) Start off as a billionaire.
 :hidechair:

"For what else is the life of man but a kind of play in which men in various costumes perform until the director motions them offstage?" -Erasmus

Online AvHdB

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Re: Starting up in Ukraine
« Reply #2 on: September 21, 2016, 04:00:06 PM »
Curious what product are you exporting?

Besides time what is 'a significant amount' that you are investing?

Using a Cypriot 'holding firm' is I understand still common in Ukraine and has been since more or less the dissolution of the Soviet Union.

I would seek a variety of opinions and avoid those who are trying to sell there own 'product'.

So you know Andrew's quip has allot of truth in it.
“If you aren't in over your head, how do you know how tall you are?” T.S. Eliot


Online msmoby

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Re: Starting up in Ukraine
« Reply #3 on: September 21, 2016, 04:04:49 PM »
SuperPanda

I can only help you re Cyprus

There are many UA representatives in Cyprus that will fall over themselves to advise you re setting up the Company

Corporation tax is 12.5 percent and zero for shipping companies


Offline SuperPanda

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Re: Starting up in Ukraine
« Reply #4 on: September 21, 2016, 04:35:40 PM »
(Q) How can a foreigner become a millionaire in Ukraine?

(A) Start off as a billionaire.
 :hidechair:
This is very true and would apply to Israel and Russia as well as the UK too.
Curious what product are you exporting?

Besides time what is 'a significant amount' that you are investing?

Using a Cypriot 'holding firm' is I understand still common in Ukraine and has been since more or less the dissolution of the Soviet Union.

I would seek a variety of opinions and avoid those who are trying to sell there own 'product'.

So you know Andrew's quip has allot of truth in it.
We'll actually be starting get up a vodka distillery however it isn't for the Ukrainian market but an add on to another business I've got a stake in, Ukraine is just cheaper when it comes to doing it, once I wrap my head around the Cyprus/Ukraine Ltd stuff.

There will be a total of 15 million UAH invested in the first year, or at least that is the plan, we'll see what happens once we've found the ideal location.

Is there a particular reason for the Cypriot holding company, aside from dividend taxes there doesn't appear to be a lot to it as the risks are there regardless and protection doesn't appear to be there either.

Thanks :)

Edit: we do have an accountant and various people in London however they're not any help for Ukraine hence why I've turned to the Internet!

Online AvHdB

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Re: Starting up in Ukraine
« Reply #5 on: September 21, 2016, 05:05:29 PM »
. . .  we do have an accountant and various people in London however they're not any help for Ukraine hence why I've turned to the Internet!

I would seek advice from either the Raiffeisen or the Rabo Bank, the Austrian's have a strong presence in Ukraine. A while back Raiffeisen announced they were pulling out, but that planning seems to have changed. Both banks have an ongoing understanding of the farming and food distribution markets in Ukraine. OK I understand it is Vodka.

Your Vodka I assume will be grain based so Ukraine makes some sense. Curious would it not make more sense to re-brand an existing product initially?

You need to be in Kiev to figure this out so it does cost you over the long or short term.
“If you aren't in over your head, how do you know how tall you are?” T.S. Eliot

Online Boris

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Re: Starting up in Ukraine
« Reply #6 on: September 21, 2016, 06:15:44 PM »
(Q) How can a foreigner become a millionaire in Ukraine?

(A) Start off as a billionaire.
 :hidechair:

Funny but true...Starting a business in Ukraine would not be on my list of things to do on "Gardening Leave." You would have to have major connections and even then it is a huge risk. By the way....what is Gardening Leave?

Online AvHdB

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Re: Starting up in Ukraine
« Reply #7 on: September 21, 2016, 06:19:36 PM »
(Q) How can a foreigner become a millionaire in Ukraine?

(A) Start off as a billionaire.
 :hidechair:

Funny but true...Starting a business in Ukraine would not be on my list of things to do on "Gardening Leave." You would have to have major connections and even then it is a huge risk. By the way....what is Gardening Leave?

Gardening Leave is a very English way of saying being lead to a very nice pasture as a bull and all the cows are on the other side of the fence and you can have no contact with said cows for a certain period of time.
“If you aren't in over your head, how do you know how tall you are?” T.S. Eliot

Online msmoby

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Re: Starting up in Ukraine
« Reply #8 on: September 21, 2016, 07:14:45 PM »


Gardening Leave is a very English way of saying being lead to a very nice pasture as a bull and all the cows are on the other side of the fence and you can have no contact with said cows for a certain period of time.

You forgot to add that the 'bull' is  (normally) on full salary - pending a decision on whether to be allowed back in the field with the 'cows' or 'put out to pasture' - sent off looking for another field .... sacked / made redundant

Online andrewfi

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Re: Starting up in Ukraine
« Reply #9 on: September 21, 2016, 08:02:11 PM »
Why not just buy the vodka  and slap pretty  labels on it?

Avoid most of the messing around. Simple transactions and the view from the perspective of the buyer is exactly the same.

"For what else is the life of man but a kind of play in which men in various costumes perform until the director motions them offstage?" -Erasmus

Online AvHdB

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Re: Starting up in Ukraine
« Reply #10 on: September 21, 2016, 08:10:41 PM »

Your Vodka I assume will be grain based so Ukraine makes some sense. Curious would it not make more sense to re-brand an existing product initially?


Why not just buy the vodka  and slap pretty  labels on it?

Avoid most of the messing around. Simple transactions and the view from the perspective of the buyer is exactly the same.

Andrew, Did you run out of crayons or colouring books? I could next week send you some or perhaps Moby could send you a book to learn to read English.
“If you aren't in over your head, how do you know how tall you are?” T.S. Eliot

Online Gipsy

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Re: Starting up in Ukraine
« Reply #11 on: September 21, 2016, 08:11:51 PM »
Personally, I would not consider opening any business in Ukraine at the moment..
There are too many hands which have to be greased....

Online andrewfi

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Re: Starting up in Ukraine
« Reply #12 on: September 21, 2016, 08:12:52 PM »
Is there something that you are struggling to say? Put down your glass, brew a cup of strong coffee and have another try.

There's a good lad.  :'(

"For what else is the life of man but a kind of play in which men in various costumes perform until the director motions them offstage?" -Erasmus

Online AvHdB

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Re: Starting up in Ukraine
« Reply #13 on: September 21, 2016, 08:16:46 PM »
Is there something that you are struggling to say? Put down your glass, brew a cup of strong coffee and have another try.

There's a good lad.  :'(

I realized something, do you need to check your eye glasses?

It is obvious you can either not read, are unable to read, or do not wish to comprehend.

Or maybe you are bored by crayons and need perhaps Lego?
“If you aren't in over your head, how do you know how tall you are?” T.S. Eliot

Offline SuperPanda

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Re: Starting up in Ukraine
« Reply #14 on: September 22, 2016, 12:28:22 PM »
(Q) How can a foreigner become a millionaire in Ukraine?

(A) Start off as a billionaire.
 :hidechair:

Funny but true...Starting a business in Ukraine would not be on my list of things to do on "Gardening Leave." You would have to have major connections and even then it is a huge risk. By the way....what is Gardening Leave?
Its been on the cards for a while in all honesty, it was between Poland and Ukraine but Poland was going to be 50% more expensive going forward.

Gardening leave is where one loses his job but gets paid a lot of money to do nothing for 3 to 6 months, I can't take another job in that time frame.
. . .  we do have an accountant and various people in London however they're not any help for Ukraine hence why I've turned to the Internet!

I would seek advice from either the Raiffeisen or the Rabo Bank, the Austrian's have a strong presence in Ukraine. A while back Raiffeisen announced they were pulling out, but that planning seems to have changed. Both banks have an ongoing understanding of the farming and food distribution markets in Ukraine. OK I understand it is Vodka.

Your Vodka I assume will be grain based so Ukraine makes some sense. Curious would it not make more sense to re-brand an existing product initially?

You need to be in Kiev to figure this out so it does cost you over the long or short term.
I'll talk to those banks later on today and see if they can point me in the right direction.

Yes it'll be grain based, I've established some suppliers for the grains and certain other aspects already. Re-branding isn't an option, while its easier, it doesn't fit in with the existing business UK side and what we want to achieve from the future Ukrainian outfit.
Why not just buy the vodka  and slap pretty  labels on it?

Avoid most of the messing around. Simple transactions and the view from the perspective of the buyer is exactly the same.
I've looked at private label options but they don't provide what we're looking for and it'll be easier and cheaper in the long run to go forward with our own product straight off the bat.